The documents were not produced.
According to the Post, SPDB could lose its ability to conduct banking activities in the United States for violating the subpoena, which was issued under the USA Patriot Act.
SPDB, China’s ninth-largest bank with $900 billion in assets, does not have a branch in the United States, but does have an account in the country to handle U.S. dollar transactions, the news outlet added.
“The ruling means that Attorney General William Barr or Treasury Secretary Steven Mnuchin can terminate the bank’s U.S. account and ability to process U.S. dollar transactions,” the report said.
The news comes amid rising tensions between Washington and Beijing since trade talks broke down in early May. The U.S. administration accused the Chinese regime of backtracking on commitments negotiated over months of talks. It responded by increasing tariffs on $200 billion worth of Chinese goods.
Since then, the United States has also effectively blocked several Chinese tech companies, including telecom giant Huawei, from doing business with U.S. firms. The regime, in apparent retaliation, said it was preparing its own “unreliable entities list” of companies, persons, and organizations that harm Chinese businesses.
Both China Merchants Bank, China’s largest bank owned by state and private entities, and Bank of Communications, China’s fifth largest bank, told Chinese media on June 25 that they were not under investigation in connection with North Korean sanctions.
Subpoenas
The April contempt-of-court ruling did not name the banks, the Hong Kong company, or the North Korean entity at the time.Meanwhile, the subpoenas were issued in December 2017 as part of a U.S. investigation into breaching of sanctions targeting North Korea’s nuclear weapons program, including money laundering.
According to court documents, the subpoenas demanded a wide range of bank records dating back to January 2012.
Transactions totaled $105.34 million, including $45.78 million that went through a U.S. correspondent account of the first Chinese bank; $1.63 million that went through a correspondent bank account of the second bank, and $57.93 million that went through a U.S. correspondent account of the third, according to court documents.
The judge’s ruling said U.S. Justice Department officials visited China in April 2018 and August 2018 to discuss the banks’ failure to respond to the requests for evidence.
In November 2018, U.S. prosecutors filed a court motion seeking to compel the banks to comply.
The three banks have appealed the April ruling. The appeal will be heard before a federal appeals court in Washington on July 12, the Post reported.
The April court order fined each of the three banks $50,000 for every day that they do not produce the documents. But the fines have been stayed pending the appeal.